Question

XYZ pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. Budgeted cost of materials purchases in July is $256,550 and $278,050 in Aug. Total budgeted cash disbursements for materials purchases in August is:______.

A) S265,150
B) $153,930
C) $166,830
D) S111,220

Answer 1

$265,150

Step-by-step explanation:

Cost of material purchases in July

= 256,550 × 60/100

= 256,550×0.6

= 153,930

Cost of purchases in August

= 278,050×40/100

= 278,050×0.4

= 111,220

Total cash disbursement

= 111,220+153,930

= $265,150